EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is made as of the
11th day of September, 1998, by and between Einstein/Noah Bagel Corp., a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx (the "Executive").
RECITALS
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WHEREAS, Executive is currently serving as Chairman, Chief Executive
Officer and President of the Company; and
WHEREAS, to assure the continued services of the Executive in such
capacities, the Company desires to enter into an employment agreement with the
Executive on the terms herein provided, and the Executive desires to enter into
such an agreement.
COVENANTS
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NOW, THEREFORE, in consideration of the premises and the mutual covenants,
terms and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are specifically
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby employs the Executive as
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Chairman, Chief Executive Officer and President for a term of two years from the
date hereof (the "Term" or "Employment Period") unless the Term is earlier
terminated pursuant to the provisions hereof. Executive hereby accepts
employment from the Company.
SECTION 2. THE EXECUTIVE'S DUTIES.
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(a) The Executive hereby agrees to serve the Company faithfully and
honestly and to use his best efforts and ability on behalf of the Company in the
position of Chairman, Chief Executive Officer and President, and as a member of
the Board of Directors of the Company, to discharge the duties as Chairman,
Chief Executive Officer and President and to perform such duties and services of
an executive, administrative and managerial nature, which duties are consistent
with his position in the Company, as shall be specified and designated from time
to time by the Board of Directors of the Company in connection with the business
and activities of the Company.
(b) The Company hereby agrees that, in his capacities as a director and
officer of the Company during the term of this Agreement, the Executive shall be
indemnified by the Company (including without limitation by advancement of
expenses) to the fullest extent permitted from time to time by applicable law.
(c) During the term hereof, the Executive shall be employed by the Company
on a full-time basis and shall perform such duties and responsibilities on
behalf of the Company
consistent with Executive's position of Chairman, Chief Executive Officer and
President as may be designated from time to time by the Board of Directors.
During the term hereof, the Executive shall devote his full business time and
his best efforts, business judgment, skill and knowledge exclusively to the
advancement of the business and interests of the Company and its affiliates and
to the discharge of his duties and responsibilities hereunder. The Executive
shall not engage in any other business activity or serve in any industry, trade,
professional, governmental or academic position during the term of this
Agreement, except as may be expressly approved in writing, which approval shall
not be unreasonably withheld, by the Board, as the Company encourages
participation by the Executive in community and charitable activities generally
considered to be in the public interest and the Company's interest. In addition,
the Company recognizes that the Executive may make passive investments which
will not interfere with his commitments and duties to the Company.
(d) The Executive agrees to observe and comply with all lawful written
rules, regulations, policies and practices adopted by the Company as they now
exist and as they may be duly and properly adopted or modified from time to
time.
SECTION 3. COMPENSATION AND BENEFITS. In consideration for all services
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rendered by the Executive to the Company pursuant to this Agreement, including
services as an officer, director, member of any committee or in the performance
of other like duties consistent with his position of Chairman, Chief Executive
Officer and President assigned to him by the Board of Directors of the Company,
the Company hereby agrees to pay compensation to the Executive as follows:
(a) Executive shall be paid a base salary at a rate of $400,000 (subject to
any increases as may be determined by the Compensation Committee of the Board of
Directors at its discretion), payable in equal bi-weekly installments in
arrears.
(b) The Executive shall participate in an annual bonus plan with a target
payout equal to 50% of the Executive's base salary and which shall be based upon
the Company's performance relative to targets generally applicable in
determining bonus compensation payable to senior executives of the Company
(currently, 50% weighted to achievement of each of EBITDA and store revenue
targets).
(c) The Executive shall participate in the Company's Amended and Restated
1997 Stock Option Plan (or such other stock option plan as may hereafter be
adopted to provide for the grant of stock options to executive employees of the
Company), pursuant to which the Executive shall receive option grants at the
same time as other senior executives of the Company and shall in any event
receive an option grant at least once each calendar year, beginning in calendar
year 1999, of a number of shares not less than 150% of the highest number of
shares subject to a regular annual option grant made to any other officer of the
Company.
(d) Executive shall be entitled to first class air travel and lodging when
he is traveling on Company business and shall be entitled to such other fringe
benefits as are paid to other senior executives of the Company.
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(e) The Company shall provide and maintain such group medical, dental, life
and disability insurance benefits for the Executive as are provided to other
senior executives of the Company.
(f) The Executive shall receive from the Company a paid vacation each year
in accordance with the present policy and practice of the Company regarding
vacations for senior executives.
SECTION 4. EXPENSES. The Company shall pay or reimburse the Executive for
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reasonable and necessary expenses incurred in the ordinary course of conducting
the Company's business and in accordance with written policies established by
the Company. Executive shall submit expense reports accompanied by receipts and
other appropriate substantiation for all items of business expenses for which
payment or reimbursement is sought.
SECTION 5. DURATION AND TERMINATION.
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(a) The Executive's employment shall be for a Term of two years commencing
on the date hereof and ending on the second anniversary hereof, unless
terminated at an earlier date pursuant to this Section 5.
(b) If during the Employment Period the Executive shall be unable to
perform his duties hereunder on account of illness or disability, he shall be
entitled to compensation in accordance with this Agreement providing that such
illness or disability lasts for less than six months. In the event such illness
or disability lasts for more than a consecutive six month period, the Executive
shall be entitled to compensation in accordance with the sick leave plan of the
Company, if any, and shall be covered by the Company's disability income policy,
if any, and in all other respects the Company's obligations under this Agreement
shall terminate.
(c) In the event of the Executive's death during his employment hereunder,
his compensation shall cease as of the last day of the full calendar month
following the month in which such event occurs, or the last day of the
Employment Period, whichever is earlier. The salary for the period following
the Executive's death shall be paid to his legal heirs or the representative of
his estate and in all other respects the Company's obligations under this
Agreement shall terminate.
(d) In the event the Executive voluntarily terminates his employment
without Just Grounds for any reason, his right to all compensation shall cease
as of the end of the month of the date of termination of his employment. "Just
Grounds" shall mean resignation by the Executive due to (i) a material breach of
this Agreement by the Company which the Company has failed to cure within thirty
days after the Company receives written notice thereof, or (ii) the material
diminution of the Executive's duties, authority or responsibilities as Chairman
and Chief Executive Officer or a member of the Board of Directors except in
connection with a termination of Executive's employment for Just Grounds.
(e) In the event (i) this Agreement and the Executive's employment shall be
terminated without Just Cause (as hereinafter defined) or (ii) the Executive
terminates his
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employment with Just Grounds, (A) the Executive shall receive from the Company
within five days after such termination a lump-sum payment equal to the greater
of (x) one time the sum of his then current annual base salary and his then
current target bonus, or (y) the amount that would have been paid to him for the
balance of the Employment Period assuming that he were to receive during such
period an annual salary equal to his then current annual base salary and an
annual bonus equal to his then current target bonus (or a pro rata portion of
such target bonus for any period less than one year), (B) the Company shall
continue to provide, for a period of eighteen months from the date of
termination and at its expense, the benefits then being provided to the
Executive at the time of such termination pursuant to Section 3(e) hereof, and
(C) each option to purchase shares of common stock of the Company outstanding at
the time of termination shall become fully vested and exercisable at the time of
termination and shall remain exercisable during the term of the option. The
amount of any payment or benefit provided for in this Section 5(e) shall not be
reduced by any compensation earned by the Executive as the result of employment
or engagement by another person, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.
(f) In the event the Board of Directors determines that this Agreement and
the Executive's services hereunder should be terminated with Just Cause, the
Executive's right to all compensation and benefits shall cease as of the end of
the month of the date of termination of his employment. In such event, the
Executive shall be entitled only to such rights as shall have vested prior to
such termination or violation, and he shall not be entitled to any future cash
or non-cash compensation, benefits or termination pay. For purposes of this
Agreement, termination for "Just Cause" shall mean (i) a termination due to (A)
a material breach of this Agreement by the Executive, (B) willful or gross
neglect of duties for which employed or (C) willful misconduct or gross
negligence in the performance of such duties, all of such facts to be determined
in good faith by the Board of Directors of the Company after the Executive has
been given written notice of his purported material breach of this Agreement,
willful or gross neglect of duties or willful misconduct or gross negligence and
has failed to cure such breach or alter such conduct within thirty days after
the Executive's receiving such written notice, or (ii) a termination due to the
Executive's committing a felony for which he is convicted with no further rights
of appeal.
SECTION 6. GOVERNING LAW AND ARBITRATION.
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(a) Any controversy or claim arising out of or relating to this Agreement
or its interpretation, construction or any breach thereof, or any relationship
between the parties hereto, whether such claim is grounded in common law or
statutory law, shall be settled exclusively by arbitration in the State of
Colorado, in accordance with the then-applicable rules of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court of competent jurisdiction. In the event of any such controversy or
claim, the prevailing party shall be entitled to recover from the other party
all of the costs and expenses of the prevailing party in connection with such
claim or controversy including reasonable attorneys' fees.
(b) The failure or refusal of either party to submit to arbitration in
accordance with this provision shall be deemed a breach of this Agreement.
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(c) Notwithstanding anything to the contrary herein contained, neither
party shall pursue the arbitration remedy provided for herein without thirty
days prior written notice, which thirty-day period shall be available for
informal dispute resolution discussions.
SECTION 7. NON-ASSIGNMENT. The Executive shall have no right to delegate
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any of the duties created by this Agreement, and any delegation or attempted
delegation of the Executive's duties, shall be null and void. In all other
respects, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, beneficiaries, personal
representatives, successors, assigns, officers and directors.
SECTION 8. AUTHORIZATION, VALIDITY AND NO-CONFLICT.
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(a) The Company represents and warrants to the Executive that the
execution, delivery and performance by the Company of this Agreement has been
duly authorized by the Board of Directors of the Company and constitutes a valid
and legally binding obligation of the Company enforceable in accordance with the
terms hereof, and that the execution, delivery and performance of this Agreement
by the Company will not violate the terms of any agreement or obligation of the
Company.
(b) The Executive represents and warrants to the Company that this
Agreement constitutes the valid and legally binding obligation of the Executive
enforceable in accordance with its terms, and that the execution, delivery and
performance of this Agreement by the Executive will not violate the terms of any
other agreement or obligation of the Executive.
SECTION 9. SEVERABILITY. If any portion or provision of this Agreement
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shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
SECTION 10. WAIVER. No waiver of any provision hereof shall be effective
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unless made in writing and signed by the waiving party. The failure of either
party to require the performance of any term or obligation of this Agreement, or
the waiver by either party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
SECTION 11. NOTICES. All notices pursuant to this Agreement shall be in
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writing.
a. Notice to Executive. A notice to the Executive shall be sufficient in
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all respects if delivered, or mailed by first class registered or certified
mail, postage and fees prepaid, or sent by an established, reputable courier
service, addressed to the following or such other address as provided by written
notice made pursuant to this Section 11:
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If to Executive: Xxxxxx X. Xxxxxxxx
000 Xxxxxxx
Xxxxxx, XX 00000
b. Notice to Company. A notice to the Company shall be sufficient in all
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respects if delivered, or mailed by first class registered or certified mail,
postage and fees prepaid, or sent by an established, reputable courier service,
addressed to the following or such other address provided by written notice made
pursuant to this Section 12:
If to Company: Einstein/Noah Bagel Corp.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000-0000
Attention: General Counsel
SECTION 12. ENTIRE AGREEMENT. Except for that certain Confidentiality and
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Non-Compete Agreement previously entered into by the Executive, this Agreement
constitutes the entire agreement between the parties and supersedes all prior
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of the Executive's employment. Without limiting the
generality of the foregoing, this Agreement supersedes that certain letter
agreement dated April 29, 1998 between the Company and the Executive and that
certain severance agreement dated May 8, 1998 between the Company and the
Executive.
SECTION 13. AMENDMENT. This Agreement may be amended or modified only by
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a written instrument signed by the Executive and by an expressly authorized
representative of the Company expressly authorized by the Board of Directors to
execute any such amendment.
SECTION 14. HEADINGS. The headings and captions in this Agreement are for
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convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
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SECTION 15. COUNTERPARTS. This Agreement may be executed in two or more
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counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
EINSTEIN/NOAH BAGEL CORP.
By /s/ Xxxx X. Xxxxxxx
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/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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